When people I respect call me a moron, I call them up and get details. Turns out he was right.
Expecting The Worst
Why was I disappointed? I was primed by yesterday's sell-off to expect bad news, so I read the Q1 looking for bad news. There aren't any consensus analyst numbers to compare, and I don't follow the discussion on the chat boards, just the news articles, so the "bad news" I latched on to was the comment that "For the EV products, the Company has not realized mass unit sales during this reporting period.
Upside Surprise
Apparently that was not a disappointment. According to Porcari, "I don’t know of one shareholder who was expecting more then maybe 300 EV’s in the quarter." He also said that the good revenue number from Kandi's ATV business was a big upside surprise. He'd been expecting sales to be flat.
Why the Sell-Off?
Porcari attributes the sell-off over the last month to a large owner wanting out, at the same time volume dried. As for the sell-off yesterday which had me worked up, he attributed it to an article at Plug-in Europe which linked to some old and discredited allegations that Kandi had been padding its numbers. I find that very credible... it does not take much to move this stock around.
Why no Big EV Sale Yet?
I was ready to believe the worst about Kandi because we have been waiting for the first a big sale of EVs for many months now. In early April, there was a EV taxi fire in Hangzhou (the most likely candidate city for a large order.) This has bureaucrats paralyzed, but should actually be good news for Kandi. The taxi which blew up was a retrofit, with the batteries inside the passenger cabin. Now officials are looking for purpose-designed vehicles with batteries much more safely stowed outside the passenger compartment. Only Kandi is ready to deliver these.
Disclosure: I plan to buy KNDI in the next 24 hours.
